People in the United States spent upward of $100 billion on lottery tickets in 2021, making it by far the most popular form of gambling. States promote the games as ways to raise revenue. But is the money really worth it? And what are the hidden costs to society and individuals?
The word “lottery” derives from the Dutch noun lot, meaning “fate.” In modern usage, it refers to any type of arranged event where prizes (money or goods) are allocated by a process that relies entirely on chance. Examples include military conscription, commercial promotions in which property is given away randomly, and jury selection.
Lottery’s popularity began in the post-World War II era. It offered politicians a way to maintain existing social safety nets without hiking taxes—which would likely enrage voters and cost them elections. As Cohen explains, it was a sort of “budgetary miracle” that allowed states to make revenue appear seemingly out of thin air.
Most people play the lottery with the clear understanding that winning is a long shot. They may have quote-unquote systems that are not borne out by statistical analysis—about lucky numbers and stores and times of day to buy tickets, for example—but they know the odds. They also understand that federal and state taxes will take a sizable chunk of their prize. And yet they keep playing, a behavior that has been shown to be irrational. It’s not just the poorer players who do this; a substantial proportion of wealthy Americans play.